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Negotiating Your Medical Bills

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Hospital Vitals MonitorIf you have medical insurance, you should receive an Explanation of Benefits from your insurance company every time you visit a doctor. Have you ever looked at one? It’s amazing. You’ll see the how much the doctor billed you, how much the insurance company negotiated as an allowable rate, and the difference can be staggering. The catch-22 in all this is that if you don’t have insurance, you’d have to pay the standard rate unless you negotiated with the doctor… and negotiating with the white coat can be hard. Fortunately, it’s not as uncommon as you think, according to a New York Times article, and here are a few tips I’ve researched from the interwebs.

Here are a few things you need to keep in mind as you approach this:

  • It never hurts to ask. I never thought to do this because I was always covered by health insurance, but millions of people aren’t or are covered by minimal benefits and they negotiate all the time. Hospitals are more like street bazaars than retail stores.
  • Medicine is business. It may feel personal to you, since it deals with your body, but it’s still a business. A doctor is like any other freelance profession, they need business and they are willing to work with you to get your business.
  • Relationships matter. Doctors don’t do it just for the money, otherwise they’d be lawyers (just kidding!). They need to earn money to pay for insurance and to maintain their practice but they aren’t about to turn someone away because they’re financially strapped.
  • They are people too. If you’re experience financial hardship, because you lost a job or lost your medical insurance, explain that to the doctor or hospital. They are likely to give you a break on their standard rates because they’ve already given discounts to faceless insurance companies, it’s not a huge leap to offer it to an individual.
  • Insurance is a pain. It’s generally accepted that insurance companies hate to pay out claims, the same goes for benefits. Their systems are usually esoteric, control codes are cryptic, and hospitals spend millions a year submitting claims and maintaining the computer systems to support that process. If they can go outside the system, preferably with cash, then they are willing to help you out.

Here are some ideas on how to negotiate:

  • Use Medicare as a starting point. Research how much the procedure would cost to a Medicare patient using the HHS.gov’s Hospital Compare tool and negotiate from there. You know they are willing to perform the procedure at those rates so it’s not an unreasonable starting point.
  • Explain your financial situation. If you can’t afford the procedure, tell them. It’s better to swallow your pride and get a procedure your body needs, plus it’s nothing new to the doctors, especially in these economic times.
  • Pay cash. As I mentioned before, dealing with insurance is a pain for doctors and hospital administrators too. If you can pay cash, it can cut down on that expense and they won’t have to worry about collecting on the backend.
  • Consider a payment plan. If you can’t pay the entire fee at once, consider a payment plan to spread the cost over several months.
  • Make sure the procedure or test is necessary. A lot of doctors recommend diagnostic tests or certain treatments without them being absolutely necessary (potentially for insurance and CYA reasons), be sure to confirm how important the test is.
  • Going during the slow season (if you can). If it’s a procedure that you can put off, try negotiating an off-peak rate as you would a vacation. There are slow seasons in any business and you can take advantage of it by getting your procedure done then for a discount. Also, if your schedule allows, offer to fill in last minute cancellations.

Finally, where you go for treatment can have a significant impact on your costs. Most people intuitively know that you don’t go to the emergency room if you have pinkeye, but a doctor’s visit may be overkill too. If you have a common ailment, consider going to a clinic rather than a doctor to reduce your costs.

Bargaining Down the Medical Bills [ New York Times]
5 Ways to Lower Your Medical Bills [ US News & World Report ]

(Photo: brykmantra)

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14 Responses to “Negotiating Your Medical Bills”

  1. Brandon says:

    We have insurance, but our chiropractic coverage is limited to a certain amount of appointments per year. If we run out of appointments, he will still give us the post-insurance rate and write off the rest. That is very nice.

  2. Brad Harbach says:

    One tip for those who have recently lost their job or suspect there is potential that they could lose their job in the near future: Go complete all of your FREE preventative treatments that your current insurance plan allows for and take care of any major problems that could require expensive surgery now in case you should find yourself jobless and without insurance in a few months.

  3. DR DAS, MD says:

    I am an MD doing family practice for the last 20 yrs. Evening hours, no appointment necessary, no insurance needed, and its only cost you $15 (YES $15) for visit, and I have a full house, not a rich doctor, but no hassels and I am very happy, all my patients follows my instructions carefully, no-one looses a paper to come back to duplicate, and I do not recv any calls from any third party insurance. So at the end of the day all my payments are 100% and tomorrow is a new day….Dr Das, MD

  4. CK says:

    If you offer your Dr. the Medicare rate they may laugh at you or punch you in the nose. The Medicare reimbursement rates are ridiculously low, hence many Docs don’t take Medicare or at least won’t take new patients on Medicare.

  5. Andrew says:

    Brandon, you may be entitled to the insurance company’s rate even if you’ve exhausted your benefits, so your chiropractor may be contractually obligated to offer that rate, rather than just being nice. Or he might be nice. Either way, it’s a good outcome for you.

  6. SarahJane says:

    You might actually want to read your insurance contract (if you have one). Your insurer may NOT have negotiated payment at all and may already have warned you that they will pay only a percentage of the medicare rate. And therefore, your doctor is being underpaid NOT overcharging – don’t be afraid to negotiate but realize that the doctor does need to be able to pay her bills.

    Also, don’t be afraid to appeal claim denials that you feel are unfair. It may only take a short letter requesting a medical review of your situation. Insurers have been known to deny claims based on UCR or medical necessity just because they think the consumer won’t complain.

    Full disclosure: I am a state health insurance regulator. I read health insurance policies to ensure compliance with state laws.

  7. carla says:

    There needs to be a blog specifically dealing with health insurance. Though I have insurance through my employer, my out of pockets costs are still pretty high (“serious illness”) and I’m always on the phone with the companies to work something out.

    There has to be a better way!

  8. jennifer says:

    I found out that you could negotiate your rates when I was unfortunate enough to have the same procedure 2x in about a month in the SAME hospital, just a different wing–SAME doctor. When I went in the first time, the out of pocket cost was around $200, When I went in the next time, they asked for $600. I was so doped up, I just stared at the check in lady and said ‘What? Why? I just did this a few weeks ago and it was $200′ She went somewhere and came back and asked me if I was unable to make the payment? I told her I just couldn’t understand why I was paying double. (being dopey really helped with this!) She asked me how $465 sounded. Is that not just crazy? How did it sound? Well I took it and then when I felt better I dealt with the discrepency and got the difference refunded. Apparently the hospital rarely (as in 1% of cases) gets payments in full, so they are just happy to get paid at all. I read an article AFTER my surgeries that said you can negotiate–better late than never!

  9. ALAN says:

    A few years back my wife needed some high dollar dental work. She went to one of those Medical Building full of Doctors of all kind. You know the type, wood paneling, fancy chairs. She left with a quote of the needed services. I then called and faxed a few other dentists in the area, who were not located in such plush areas. One replied back with a bid for the work and saved us over %2500. He was great, took our cash at each visit and got the job done well. He was located in a rougher area in an old house. His waiting room was somewhat like a jail cell, but for that kind of money it was OK.

    Last year I found a bargain on some 8ft tall bookcases ($5 at a State Surplus Sale) that I wanted to donate to a school. As I was unloading, I fell out of the back of the U Haul. Flat out on the hard pavement where I really racked up my back and neck.
    I went for chiropractic services that was cheap and did a great job. He allowed me to decide when I felt I needed to come in for a visit, instead of telling me I had to be there 3 times a week. But again, with no insurance all visits came out of my pocket. I made him an offer he could not refuse. I paid for 10 visits upfront using a credit card and he gave me a 20% discount. So it went from $400 down to $320 and we were both happy. I saved 80 bucks and he had cold hard cash up to 60 days before he preformed the service.

    My heart Doc is a great guy and helps direct me toward cheaper services. Up to even telling me NOT to go to the Hospital that he has invested in, because they charge more than another place. He has made me a deal, if I will pay by Credit Card at each visit, he will only charge me HALF. We discuss each test and we decide if it is worth the cost and why.

  10. Beth says:

    My husband is uninsured and was recently rushed to the ER. He was in the hospital from 6-25-0 to 6-27-09. He was supposed to be in ICU,but they had no beds. He spent from 9:30 PM on 6-26 to late afternoon in the ER. I went and got an itemized bill and the first thing I saw was that they charged $562.00 for acetaminophen. Also when I asked what was cheaper the ER or the ICU, I did not get a direct answer. I was told that my husband would get the same care as if he was in the ICU and there would be no additional charge. They sent down a nurse from the ICU the first night and they charged me all most $1,500.00 for her services. Also on 6-26, an intern messed up his ventilator and my husband was not getting enough air. Because he was strapped to the bed, he was unable to let any one know about the problem. No one came to check on him for two hours. Two hours that he said fe felt like he was drowning. I feel that their is gross negligence there.

    There are lump sum amounts for pharmacy (however most of the drugs are itemized) and a lump sum for supplies. Pharmacy charges are over $2,000.00 and supplies are all most $2,00.00

    Also, the paramedics did not pass on the correct information about what was wrong with him and they never came out and asked me about it. There for there were procedures done that did not need to be done.

    Our total bill is all most $27,00.00 dollars. My husband is also unemployed at the moment and all we have is a modest saving account and a couple of small IRA.

    I have done a lot of research about getting help, getting medical records and going over them with the billing office and medical records records dept.

    If any one knows of any place that might give me more information (especially about what the billing codes mean) i would greatly appreciate it.

    Thank you

  11. ChristineWithRegence says:

    Why is the cost of health care procedures and treatments so mysterious? How come I don’t know the cost of a test or an office visit? Check out this funny scenario video:
    http://whatstherealcost.org/video.php?post=45-seconds-to-share


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